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Man Utd bonds perform badly in the market

Manchester United's first bond issue, launched barely a fortnight ago, is in danger of falling flat after analysts confirmed it has become one of the market's worst performers this year, reports The Times. Last week, the club confirmed it had raised the £500 million investment they sought to get the club's spiralling debts under control.

However, the price of United's £250 million sterling denominated bonds has tumbled to just 93 per cent of their original face value, while the value of the $425 million of dollar-denominated bonds has fallen to 94.5 per cent of their face value.

More than 50 low-risk investors, primarily insurers and pension-fund providers, stumped up the cash at a fixed annual interest rate of 9 per cent. However, if an investor had bought a £100,000 bond, he would have made a loss of £5,000.

Some analysts are claiming the bonds have been priced too highly, although the club have declined to comment.

"In a benign credit market, Manchester United is one of the worst performing bonds since the beginning of 2009," Suki Mann, a credit strategist in London at Societe Generale, told the Financial Times.

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